Indian Customers Prefer Petrol Vehicles Again

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Indian customers are shifting back to petrol run cars over diesel vehicles these days. The very narrow price difference between the fuels is the cause.

In recent sales, the sales of diesel engined cars have dropped 7 percent and sales of petrol cars have increased 11 percent.

This change in mind for the customer is making the automobile manufacturers rethink and rework their production plans and schedules for the upcoming festive season.

Petrol is getting cheaper after the Government phased out subsidy for diesel. Compared to a year earlier, the price of diesel is now 14 percent more expensive and petrol has decreased.

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Diesel cars which flooded the market for two years are slowly dropping in sales due to the fact that petrol is just INR 12 more for a litre compared to diesel.

For example, when Honda introduced their first diesel engine in their compact sedan, the Amaze in 2013, the Japanese car maker saw 80 percent of the buyers go for the diesel variant. Now, in their sales in July, Honda saw just 50 percent of their customers chose the diesel option.

According to a few experts, the ultimate time for the petrol cars to recapture the market is this upcoming festive season.

The largest car maker in the country, Maruti has also halted plans to open a new diesel engine plant in Gurgaon and are concentrating on sales of their petrol vehicles.

Amit Kaushik, a principal analyst says that the overall ownership and running cost of diesel fuelled vehicles have gone up.

It is not long before the price difference between petrol and diesel closes up with the Government of India's plan of increasing the price of diesel by INR 0.50 every month till it reaches the market value.


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Story first published: Wednesday, August 20, 2014, 15:00 [IST]
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